The economic and financial document arrives tomorrow at the Council of Ministers with the estimate of programmatic GDP growth, according to Mef sources, revised upwards to +1%. The economic planning document of the end of last November formulated a projection on that figure of +0.6%. The deficit/GDP ratio, on the other hand, stands at 4.5%. For 2024, on the other hand, the Def estimates a +1.4% growth in programmatic GDP (in the Dp it was +1.9%) while the deficit stands at over 3%. In recent weeks, the technicians of the Ministry of the Economy have worked on the economic and financial document, taking into account the indications of maximum prudence on the estimates given the macroeconomic scenario, characterized by great uncertainty due to the global tensions triggered by the invasion of Ukraine by the Russia, with the subsequent rise in prices, starting with energy prices, which led to high levels of inflation.
Another key figure in the document expected in the CDM is the growth forecast: the 2023 trend GDP (which analyzes the situation net of public finance maneuvers) will settle at 0.9%, a figure revised upwards compared to what is written in the Dpb which estimated a “loss of momentum in activity”, with growth “revised downwards” to 0.6%. While the trend deficit/GDP ratio for 2023 will be 4.35%.
A growing trend that is confirmed by Bank of Italy, which observes in the latest economic bulletin: «According to our models, economic activity in Italy would have increased slightly in the first quarter of 2023, supported by the manufacturing sector, which benefits from the of energy prices and the easing of bottlenecks along the supply chains».
The debt-to-growth ratio falls in the estimates contained in the Def. In 2025, it is reported, the ratio of public gross debt to GDP will be 140.9%, down from 144.4% in 2022. A slightly better estimate than the end-of-year Dpb, which instead noted in 2023 a gross public debt “at 144.6% of GDP, while in the final year of the projection, 2025, at 141.2%”. Ministry sources recall that in drafting the economics and finance document, Minister Giancarlo Giorgetti adopted a “prudent and serious” approach to estimates relating to growth and debt, in line with the dialogue and relationship with the EU and with the country’s public debt situation. A type of approach, it is recalled, that had already been adopted in recent months with the Nadef and the budget law.
On 27 March, the Parliamentary Budget Office sent its findings relating to the provisional 2023-26 macroeconomic framework sent by the MEF on 20 March. Among the variables that will impact on GDP growth is the state of implementation of the Pnrr, which has been at the center of a political dispute for the past week over delays in tenders that would jeopardize the use of part of the resources. Last week, the latest Italian Macroeconomic Bulletin drafted by EY also warned that if resources in the Pnrr are spent for 70% and 90% of what is forecast in 2023 and 2024, GDP may not grow this year and will resume ‘1.8% next. If, on the other hand, around 50% of the forecast is used, the Italian economy would grow again in 2024, at a rate of 1.5%, after a contraction of 0.3% in 2023. Meanwhile, the Chamber of Deputies is ready to examine the Def as soon as it is approved by the CDM, it was reported after the last conference of the Montecitorio group leaders. As soon as there is the go-ahead from the government, the Montecitorio work calendar for April will be updated.
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